According to last Saturday's Express Housing expert* John Wriglesworth said: “I do not believe we will have a price crash ... I think there is more chance of finding Elvis on the moon than house prices crashing over the next five years".
* What sort of qualifications do you need to count as a 'housing expert'?
Monday, 31 March 2008
According to last Saturday's Express Housing expert* John Wriglesworth said: “I do not believe we will have a price crash ... I think there is more chance of finding Elvis on the moon than house prices crashing over the next five years".
Yup. The rest of the world is still in thrall to the MMGW nonsense, whereas we have seen the light!
Sunday, 30 March 2008
Just watched episode two. It's still brilliant edge-of-the-seat stuff.
But why on earth did the Irish fairground guy call him 'Billy' to his face? After he'd made his 'phone call he should have just kept walking. And am I right in assuming that ambitious young reporter is a repressed gay? Or is he just a total sadist?
Vindico* has trotted out the the tired and tested mantra "... the empowering reforms of Thatcher's council house sell-off; the creation of an asset owning society." which set me thinking about 'vote buying'.
As an aside (this not being the main thrust of this post, but worth mentioning) I personally object to the sale of council houses at undervalue;
1. It was (and still is) ruthless vote buying.
2. If the State sells off assets, then it should try to obtain the best price on behalf of the ultimate owner of those assets, i.e. the taxpayer.
3. Obviously, the sale of shares in state-owned monopolies at undervalue to the general public (i.e. the taxpayer) in very small lots is perfectly OK, the winners and losers are the same people. This does not apply to the sale of council houses to individual 'better off poor' households**.
But that is not the main point of this post...
4. Which is ... that is no way to buy votes! The Tories simply made one-off gifts, worth £10,000 or £20,000, to a small strata of council tenants. Once those people have cashed in their capital gains and bought privately, there is no motivation to vote Tory again; the cupboard is bare, the ammunition spent.
5. As ever, Nulab have shown how to do it!. First you create an army of two million 'key workers' on not-particularly-high-salaries; then you engineer a bubble in house prices; then you offer said key workers all manner of gimmicky shared-ownership schemes***, which seem attractive enough on first sight, the hook being, once you sign up you are a tied worker; if a key worker is ever tempted to give up his or her job as, let's say, a Senior Play Ranger then the simple fact that they will simultaneously be forced to move home and sell what little 'shared equity'**** they have to the State's preferred bidder makes the whole procedure (changing jobs and moving home) far too stressful, so they stay put.
6. And they are also captive voters; to keep their homes, they have to keep their jobs, and to keep their jobs they have to keep voting Nulab, as any sensible new government would scrap all these stupid jobs (and there are, as mentioned, at least two million of them). Brilliant! And it's all done with taxpayers' money!*****
* With whom I agree on most things, of course.
** If they can afford to buy, they shouldn't be in council housing anyway. It'd be far better and cheaper to increase their rents while simultaneously reducing housing benefit to private tenants - that way, the better off poor would be able to buy up the homes that are no longer profitable for private DSS landlords; and the benefit claimants would move into the newly vacant council housing.
*** And rename them regularly, they are currently called 'Social HomeBuy', 'New Build HomeBuy' and 'Open Market HomeBuy'.
**** And of course, once prices have slumped and our tied workers have negative equity, they will have the added pain of buying themselves out of slavery. Perfect!
***** A tax which falls particularly heavily on property developers, who have to sell a certain fraction of new-builds to the Powers That Be at cost-price for them to pass on to their tied-workers, and on private sector workers who of course are chasing a relatively smaller number of homes for sale. It's a bit like the system of redistribution in Zimbabwe, but much more sophisticated.
We went to see this film today. It's quite charming but neither that brilliant nor that funny.
The highlights are the bossy, manipulative kangaroo (clearly based on Hillary Clinton) and the CGI effects when the Mayor walks down the corridor balancing about ninety-six glasses of water on two small trays.
Saturday, 29 March 2008
The Times carries an article about some 'secret plans' to flood the Norfolk Broads hatched out by a totally evil super-quango*.
The highlight is this quote from the quangista ...
“The increasingly unsustainable** nature of the Horsey to Winterton frontage beyond the next 20 to 50 years opens up the possibility of realigning the coast as described within this time frame. It can also be argued that by selecting a radical option now, the right message about the scale and severity of the impacts of climate change is delivered to the public.”
Wot? They are threatening to flood this in order to "deliver a message" about a non-existent threat? Why not go the whole hog and demolish the Thames Barrier while you're at it?
* From the article ..."Natural England, the body born out of the Countryside Agency and English Nature...". That's equivalent to saying 'the bastard offspring of Rose West and Harold Shipman' as far as a quangophobe is concerned.
** I hate that word. AFAIAC, if local landowners club together to fund better sea defences to protect their property and livelihoods, then good luck to them.
This is just to point out that 'upside down' is one of the few phrases that you can write upside down in most typefaces.
The Remittance Man does a fine job of laying into this pile of shite, as meekly regurgitated in The Daily Telegraph.
From the 'No shit Sherlock' department comes the following ...
"... researchers counted the number of takeaways near schools in each local authority area. In areas such as Rutland and Windsor there were just over 10 fast food outlets per secondary school. But in Brighton there were 46 - twice the national average of 23. Blackpool and Hull were joint second* with 40 ... There are more than 82 fast food outlets for every secondary school in the London borough of Westminster, and 47 in Kensington and Chelsea."
Assuming that 'near schools' means 'within a few minutes walking distance', it is safe to assume that there is more of just about anything within walking distance of any random point in a densely populated area than in a rural area (except sheep and cows and so on).
Let's list those areas by ascending number of takeaways per school and look at their population densities per the 2001 census ....
Rutland "the most rural area in England & Wales"
Windsor - population density 44.17 people/hectare **
Blackpool - pop. density 46.02 people/hectare
Kingston-upon-Hull - pop. density 37.47 people/hectare
Brighton - pop. density 65.6 people/hectare
Kensington & Chelsea - pop. density 128.39 people/hectare
Westminster - pop. density 82.32 people/hectare
So it's not a perfect correlation, but if we further adjust the figures for areas with a lot of tourists/visitors, where you'd expect more takeaways; for seaside areas, where you'd expect more fish'n'chip shops (bracing sea air and you can get it fresh); and John Prescott (hence the relatively large number of fast food outlets in Hull), you could get pretty close.
We could just look at total population. The mythical village of Emmerdale may well have 100 inhabitants per hectare, but there sure as hell aren't many takeaways. Let's list those areas in ascending order again and see if there is a correlation with total population per the same census:
Rutland - not listed
Windsor - population 30,568
Blackpool - pop. 142,283
Kingston-upon-Hull - pop. 301,416
Brighton - pop. 134,293
Kensington & Chelsea - pop. 158,439
Westminster - pop. 181,766
So that's not perfect either - as a rough guide, the number of takeaways per school is roughly population divided by 3.3 - Hull is a downwards blip this time, but we are getting closer.
* Joint second after Brighton. And Westminster. And Kensington & Chelsea, so technically that's joint fourth, only I do not know what level of reality we are operating on here.
** A hectare is some newfangled thing that's about two-and-a-half times as big as an acre, which in turn is about the size of a football pitch. Besides, have you ever been to Windsor, FFS? It's all Ye Olde Teashoppes and antique shops, ladies' milliners and funeral directors.
Friday, 28 March 2008
All politicians, i.e. people who don't understand economics but who are somehow in charge of meddling in the economy, love talking about "shifting taxation from production to consumption"*.
The argument is that taxation of production/income deters income/production (A Good Thing) and taxation of consumption deters consumption (A Bad Thing); hence the stated aim of those who favour consumption taxes must be to deter consumption.
Taking mortgage lenders as an example, there are two methods of deterring consumption (i.e. the taking out of mortgages):
Method 1 is to increase the interest rate on mortgages by half-a-percent (which is what would happen if we made mortgage interest subject to VAT, for example).
Method 2 is for each bank or building society to position a pair of ravenous Bengal tigers outside its branches.
Now, would any politician suggest chaining up ravenous tigers outside every bank, cinema and retail outlet to discourage consumption? How the f*** are the people who work in said banks, cinemas or retail outlets (and their suppliers) supposed to earn a living?
* They're all at it - from the Red Chinese, via the CDU-SDP coalition in Germany and the the Tories all the way to the right wing nutters in the USA.
Time for some more fun with numbers:
1. Nominal GDP in 1996-97 was £778.7 bn*.
2. Total nominal GDP for the ten years 1997-98 to 2006-07 was £10,592 bn.
3. If we'd had no real growth whatsover since 1996-97, i.e. if GDP had merely increased in line with RPI, total GDP in the same ten-year period would have been £8,992. So 'extra' GDP was £1,600 bn.
4. Household debts increased from £500 bn to £1,325 bn between May 1997 and April 2007.
5. Nominal government gross debt increased from £401 bn to £574 bn over the same period, chuck in another £50 bn for latent PFI & Northern Rock liabilities, that's an increase of £223 bn.
6. So two-thirds of that 'extra' GDP of £1,600 bn was financed purely out of additional household and government borrowing of £1,048 bn**.
Sure, for every liability, there is an asset. But that's not much consolation for the 95,000 families whose homes were subject to repossession orders last year; future taxpayers who are going to have to pay off this borrowing binge or depositors at banks who can't get their money back.
* All figures from here unless stated.
** So true 'extra' GDP over the last ten years was £552 bn. Which is equivalent to an annual £10 bn increase in GDP for ten years (£10 + £20 + £30 ... £100 = £550) or an average of about 1% economic growth.
I have posted this at LabourHome as well, just to see how they respond.
Thursday, 27 March 2008
For some reason, a lot of people blame estate agents for the past ten years of rampant and ridiculous house price inflation.
Agreed, yes, life is particularly easy for estate agents in general when house prices are rising - but by the same token, with easier profits comes more competition. Conversely, their life becomes much more difficult in a falling market, and then they long for the days of low-but-stable house prices.
So, for the next year or two we will no doubt hear horror stories about estate agents talking the market down again.
The original Picking Losers 'blog seems to have gone to sleep, but there are two articles in today's FT that bring this all back to life.
In the first, the nuclear industry is calling for hidden subsidies (cut price access to waste storage facilities) and in t'other the games industry is calling for tax breaks to prevent programmers relocating to Canada (where they get "30 to 40 per cent of their wage bill refunded ... while employees are offered income tax holidays for up to five years").
Call me old-fashioned, but I am happy to pay market value for my electricity, however generated, and I don't buy games anyway. But I am buggered if I, as a taxpayer, should subsidise a French state-owned enterprise or other people's hobbies.
Via Dennis Cooper, who adds "I'm sure that plans to fingerprint all passengers at Terminal 5 have nothing whatsoever to do with the EU, because if there was any connection the BBC would have mentioned it."
Stuart Gulleford, you rock!
Just to show that it's not just the lefties who want the government interfere in people's private lives, Jill Kirby, director of the Centre for Policy Studies responded by saying "It's obviously worrying that they have reached such a low ebb but perhaps not surprising in view of the lack of Government policy over the last 10 years encouraging marriage".
Wrong, wrong, wrong! It is not the job of the government to encourage anything, however worthy. It is far more important for the government not to encourage single-parenthood and penalise marriage via the welfare and tax system. And to recognise pre-nuptial contracts, even if couples are only ask to tick one of three boxes*, as in many European countries.
Furthermore, the tax and welfare system has long discriminated against couple families, in particular since the Tories introduced independent taxation in 1990. We can't just blame Nulab for all this.
* Complete separation of assets; complete pooling of everything to be shared 50/50 on divorce; or compromise whereby pre-marital assets are ringfenced but any net gain during the marriage is shared 50/50. Doing away with the presumption that the woman gets the house and the kids and is entitled to maintenance would help as well.
Wednesday, 26 March 2008
In other news, "Sarah Brown helps Carla Bruni seek out a badly fitting and frumpy coat/skirt combo".
UPDATE: Carla Bruni completely spoils joke by offsetting frumpy coat with jaunty Jackie O-style hat:
* UPDATE2. Rather infuriatingly, the link to the original article titled "Sarkozy seeks better ties with UK" is broken and BBC website is not working properly.
UPDATE3. Link is now working but they have changed the headline, thus ruining the joke. And my Jackie O comparison of today midday has become an instant cliché in MSM.
Tuesday, 25 March 2008
OK. Let the right wingers yap on about reducing corporation tax (the second least-worst tax*) and increasing taxes on consumption (like VAT, the worst tax of all - see Business Taxation part 1); let the lefties yap on about increasing Employer's National Insurance Contributions to force employers to pay towards the Welfare State and increasing the National Minimum Wage**. As usual, they are all talking crap, the truth is much more mundane than that.
In the absence of any taxes, we would have 'full employment', which unfortunately does not mean that everybody would have a job, it just means that we would have the optimum/equilibrium level of employment and output, as follows:
Now, on a simplistic (and probably correct) level, employees work for their net salaries. An employee is indifferent between between £100 gross taxed at 33% (22% income tax plus 11% Employee's NIC) or £67 tax-free. So the tax is actually borne by the employer. But the employer gets corporation tax relief on the gross salary, so if we had a truly flat tax of (say) 31% for corporation tax and income tax/Employee's NI, the tax borne by the employer and the corporation tax relief thereon would cancel out; we would still be somewhere close to 'full employment':
Unfortunately, we also have Employer's NI Contributions of 12.8% of salaries. So a gross wage of £100 costs the employer £78.96 (£100 plus £12.80 Employer's NI less 30% corporation tax relief); but the employee nets £67, so that's an additional 18p lost in tax for every £1 that passes from employer to employee. So businesses are encouraged to use machines, automation or imports instead (in itself not a bad thing, different topic). So the net cost to the employer increases, the net salary received by the employee goes down and we have totally unnecessary unemployment:
As ever, things are even worse than that. The demand for labour is relatively price-elastic (look up 'determinants of price elasticity of demand') but the supply of labour is far less price-elastic. To put it bluntly, the most of us have no choice but to work, however low our net wages. Thus the reduction in overall employment levels is far closer to 18% than 9% (which it would be if demand for and supply of labour were equally price-elastic), as follows:
Now, here's that same diagram again, with the corners labelled A, B, C, D, E. (for clarity):
Right, let's expand those areas and put names and values to them:
If we scrapped Employer's NI, the government would lose £37 bn Employer's NI, but it would save (up to) £20 bn welfare payments; collect (up to) an additional £17 bn income tax/Employee's NI and collect at least another £11 bn in corporation tax. The deal would be more-or-less self financing!; it'd save employers a huge administrative headache; it'd help us towards full employment; and it'd enable us sack a few tens of thousands of civil servants.
Who's up for it?
Employer's NI is total NI of £97 bn from here x 72% (28% of workers are directly or indirectly employed by the state anyway, see Column M) x 54% (Employer's NI is 12.8%, Employees' NI is 11%, so Employer's NI is about 54% of the total).
Income tax is £149 bn from here again, less a fifth that relates to investment income and taxable pensions, plus Employees' NI (£97 bn x 46%).
Total working age welfare payments per DWP's Table 3 is £19.6 bn, plus £14 bn Tax Credits, plus £7 bn notional cost of below-market rents in social housing, makes £40 bn, knock off half for the elderly, the truly incapacitated and the totally unemployable.
I have guesstimated the missing figure; the additional income tax/Employees' NI that would be collected at £17 bn, or 10% of current receipts of £165 bn.
Scrapping Employer's NI (assuming it is borne by employers) would increase their profits by £37 bn, so the additional corporation tax would be 30% of that, or £11 bn, even assuming no increase in economic activity.
* Along with flat rate income tax, obviously. I fail to see any real difference between income tax and corporation tax.
** Of course, I would scrap the NMW and reduce the level of means-testing of benefits instead, different topic. And Working Time Directive and Maternity Leave regulations will go straight on the bonfire as well.
A Conservative councillor is alleged to have called for "compulsory sterilisation of all those who have had a second child - or third, or whatever - while living off state benefits".
There is a much simpler and better solution to all this.
Monday, 24 March 2008
This is what happens when you have a stupid tax (Business Rates) and an even more stupid loophole (exemptions for part-completed buildings).
This is of course easily fixed - replace Business Rates, VAT on constructions and renovation, corporation tax on capital gains and Stamp Duty Land Tax (and any other property-related taxes you can think of) with Site Value Rating, an annual charge of a fixed percentage of the site-only value of all non-residential land, regardless of whether they are undeveloped, part-developed, completed or derelict.
That'll encourage developers to get projects finished and let out. All things being equal, this will encourage development while keeping commercial rents low, thus boosting the economy overall.
Exactly the same principle applies to vacant residential properties. The current ham-fisted combination of confiscation and subsidies clearly achieves nothing.
It'll be interesting to see how this story pans out.
Nice to see one of these bastards getting a taste of their own medicine.
* Journalists at The Sun can't spell "gypsy".
Sunday, 23 March 2008
I don't watch much telly - it's just sort of on in the background, most of the time - but I must say, this new series on ITV is brilliant.
It's a lot like Performance but without the druggie stuff, i.e. loads of senseless violence and a few sexy scenes that are totally seedy and mildly unpleasant. But somehow compulsive. My favourite character so far is the young reporter.
I can now put some numbers on my proposal that local voters should decide whether or not their local Post Office should be subsidised, and if they decide to do so, the subsidy should be collected via their Council Tax. The closure of 2,500 Post Offices will cut losses of £4 million per week, if I understand this correctly.
So that's £200 million subsidy per annum divided 25 million households/Council Tax payers = an average increase in your Council Tax bill of £8 per annum to keep your local Post Office open, which may or may not seem like good value.
Saturday, 22 March 2008
Teaching Maths In 1950s
A logger sells a truckload of lumber for £100. His cost of production is 4/5 of the price.
What is his profit?
Teaching Maths In 1960s
A logger sells a truckload of lumber for £100 His cost of production is 4/5 of the price, or £80.
What is his profit?
Teaching Maths In 1970s
A logger sells a truckload of lumber for £100. His cost of production is £80.
Did he make a profit?
Teaching Maths In 1980s
A logger sells a truckload of lumber for £100. His cost of production is £80 and his profit is £20.
Your assignment: Underline the number 20.
Teaching Maths In 1990s
A logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of £20.
What do you think of this way of making a living?
Topic for class participation after answering the question: How did the birds and squirrels feel as the logger cut down their homes? (There are no wrong answers, and if you feel like crying, it's ok.)
Teaching Maths In 2008
Handlowiec drewna sprzedaje *truckload* drewna dla GBP100. Jego koszt (oceniony) produkcji by GBP80.
Zrobia‚ on wyrabiaja… korzya?
Friday, 21 March 2008
We saw a super performance at the Tate Modern today, it's basically the Turbine Hall full of BNP skinheads and Islamists shouting racial abuse at each while young black thugs threaten the audience with knives.
Apparently, it's supposed to encourage the viewer to think about badly laid concrete foundations.
Further to my recent post about local councils (those affected by the airport) charging for landing slots, I can now put some numbers on it.
In yesterday's City AM, it was mentioned that Continental had paid £100 million for four take-off and landing slots. Seeing as you need a 'pair' (one to take off and one to land), that's £25 million per pair that airlines are happy to pay. Assuming that Continental amortise this over ten years at the longest, that's £2.5 million per slot per year, divided by 365 days = £7,000 per take off.
The figures are all over the place; peak slots and slots to New York are of course worth more than early or late slots to Manchester, other figures quoted are 'Up to £20 million per pair'; '£30 million for seven or eight more daily flights'; £20 million or £30 million per slot pair. So let's go low, say £10 million for an average slot, amortised over 10 years divided by 365 days is about £3,000 per flight. Add on £30 per passenger average Air Passenger Duty x 300 passengers = £9,000, £3,000 plus £9,000 = £12,000.
We can ignore landings and assume that the charge is just for taking off. Airlines would still be profitable even if they were charged an average of £12,000* for each take off (Air Passenger Duty would be scrapped of course). Those airlines that have paid through the nose for slots would be spitting feathers, of course, but that's just tough. As the amount of noise and air pollution and strain on local infrastructure round the airport is much the same whether an aeroplane is flying to Manhattan or Manchester is neither here not there.
Heathrow has 471,000 aircraft movements a year, so call it 235,000 take-offs**. 235,000 x £12,000 = nearly £3 billion*** in totally non-distortionary tax each and every year to be spent on public transport, local infrastructure, sound insulation etc.
* Obviously, the exact rate would be set by auction. Airlines would submit sealed bids for how much they offer for how many slots, they would then be allocated in order of who offered most. Some airlines will collude, of course, but on the whole airlines hate each other, so there will always be some outsider prepared to offer that little bit more, just to rub BA's nose in it, if nothing else.
** Check: one take-off per minute, twelve hours a day for 365 days a year = 262,800, so seems about right.
*** Check: total APD receipts 2007-08 £2 bn, maybe £3bn is a tad on the high side for just our largest airport, but it can't be miles off.
Thursday, 20 March 2008
The problem is, as a result of the long term decline in standards, they have no idea how many.
Jumping H F***! What's it all about? The article ends - presumably completely accurately - as follows:
"The building has been described as having structural problems which do not meet today's requirements, but is said not to be unsafe to staff, patients or the public. A senior health official has said previously that there are only risks if the asbestos is disturbed"*.
OK, own up! Which local 'asbestos removal experts' have been paying backhanders?
* Which is what sensible people have been saying all along.
Damn and blast!
The Golden Era of central-government-free Belgium has ended after nine months of glorious non-legislation - nothing was banned, no new taxes were introduced, no EU treaties were signed, nothing.
Yada, yada, I don't believe any of this guff any more, the latest Shock! Horror! is that the Arctic Ice is melting* and that this will cause the oceans to cool down. As I live on a small island in the North Atlantic that is kept relatively warm for its latitude by the Gulf Stream, this, if true, would really piss me off. But by the same token, isn't this a glorious example of how the climate regulates itself?
See also "Global warming blamed for unusual cold spell", I shit ye not.
* Also from the article, this fascinating factoid: "Last winter, 15 million sq km of ice formed over the Arctic – a four per cent rise and the most since 2003".
Wednesday, 19 March 2008
I added Pommygranate's fine post "Ten things you should know about hedge funds" to my 'Words of wisdom' section back in August 2007 (and it was not particularly original even then, it's just a very good summary).
Martin Wolf* wrote a scholarly summary of some academic analysis, produced by "two distinguished academics, Dean Foster at the Wharton School of the University of Pennsylvania and Peyton Young of Oxford university and the Brookings Institution" for today's FT, which says much the same thing. Without the humour.
Blogosphere: one, MSM: nil.
* Do not get me wrong, I am a big fan of Martin Wolf, all in all.
There's no smoke without fire.
Whether there was any truth in the rumours; whether this was ruthless insider trading; or whether it was blatant market manipulation is neither here nor there. The fact that so many chaps at the Stock Exchange were prepared to believe them speaks volumes.
It would be way cool if Nicholas Soames MP (Con, Mid Sussex) rocked up at Court on a quad bike. Towing a trailer with two un-helmeted and un-safety-belted kids in it. With a couple of hunt saboteurs jammed under the axles.
Look chaps, all this wrangling is not a matter for central government! If people are happy for post offices to be subsidised, then this should be paid for out of local taxation paid by local voters. And subject to local referenda.
I must admit I wasn't sure whether he was still alive until I saw this. I've read a couple of his books, they were pretty good.
On the topic of geostationary satellites, which he invented, along with solar sails*, from the point of view of somebody standing on The Moon, Planet Earth is a geostationary satellite. Not many people know that!
* He had a bit part in inventing radar as well.
Tuesday, 18 March 2008
This is all rather chortlesome, really.
It has always been the case that changes in the very short term rate paid on loans between central banks and commercial banks have had little effect on long term rates. Indeed, increases in the short term rate sometimes lead to a reduction in long term rates, because a higher short term rate chokes off inflation and thus makes long-term bonds a better investment (and vice versa). In today's markets, there is not even any correlation between the Fed funds rate (or BoE base rate) and variable rates charged on mortgages. See for example a couple of Thursdays ago, when the BoE left rates unchanged and some UK banks celebrated by increasing mortgage rates by 0.3%.
The problem, as ably outlined in today's FT, is that nobody trusts anybody any more.
So this is not so much throwing caution to the wind as flushing it down the toilet.
"Dear Mr Hague
I note that on March 11th you replied to an intervention by Bill Cash as follows:
11 Mar 2008 : Column 167
"Mr. Hague: Given the growth of the EU’s powers, British sovereignty and the ultimate supremacy of Parliament need a constitutional safeguard, but I also say to my hon. Friend that the legal implications of any such provision must be absolutely clear. More work would need to be done in the future on the context and formula by which it is achieved, but I have great sympathy with the constitutional safeguard of ultimate supremacy."
I wonder whether the Conservative party is now doing that work, and whether it will be attempting to insert such a constitutional safeguard into the European Union (Amendment) Bill during its passage through the Lords?
Dr D R Cooper"
Joshua Brookes ... you rock*!
* Plus, I just love photos of cute chubby toddlers holding telephones.
It is a matter of history that when Supreme Commander of the Allied Forces, General Dwight Eisenhower, found the victims of the death camps, he ordered all possible photographs to be taken, and for the German people from surrounding villages to be ushered through the camps and even made to bury the dead. He did this because he said in words to this effect:
'Get it all on record now - get the films - get the witnesses - because somewhere down the track of history some bastard will get up and say that this never happened.
All that is necessary for the triumph of evil, is for good men to do nothing'.
This week, the University of Kentucky removed The Holocaust from its school curriculum because it 'offended' the Muslim population which claims it never occurred. This is a frightening portent of the fear that is gripping the world and how easily each country is giving into it.
Caveat - this may be a slight exaggeration or even a completely false rumour.
Monday, 17 March 2008
They have kindly published my article on Land Value Tax today. All comments - positive or negative - would be gratefully appreciated!
Say what you like about the Yanks, they don't mess about do they?
Bear Stearns sort-of-collapsed last Friday and a fire sale to J P Morgan has already been organised!
And that $30 billion (£15 billion) loan/guarantee from the Fed looks like good value compared to the UK government effectively guaranteeing all £120 billion of Northern Rock's 'assets', a good six months after it went *pop*.
Sunday, 16 March 2008
Saturday, 15 March 2008
The newspapers are full of the gory details of the Bear Stearns debacle, which is just the US version of the Northern Rock debacle over here, i.e. five times as big *yawn*.
The HBOS story* is a lot closer to home. I don't normally comment much on these financial stories because they are usually full of arcane jargon and inaccurately reported anyway. Even though £750m is not much money for a bank like HBOS, a few killer facts deserve emphasising:
HBOS has raised £750m of new capital at a staggering interest rate of almost 9.5% ... The interest HBOS is paying investors in the new bond is roughly [3.5%] higher than the rates it is charging mortgage customers.
Although HBOS has one of the strongest balance sheets among the UK banks, its chief executive, Andy Hornby, has repeatedly warned the markets that the credit crunch is far from over.
The new capital, raised through a 10-year bond, is structured to rank on a par with shareholders’ equity.
The fundraising move is designed to help maintain HBOS’s Tier 1 capital ratio at 7.7%.
So this isn't a short term fix - they are stuck with this for ten years; seeing as banks make money by charging higher interest rates than they are paying, that suggests that HBOS' mortgage interest rates are going to sky-rocket fairly soon; and unlike most other banks, they have given up trying to pretend that all-is-well in the City.
That Tier 1 ratio of 7.7% means AFAIAA that if they have to write down the value of the money they have lent to borrowers by 7.7% or more, the bank is completely wiped out. Yes, I know that historically, a Tier 1 ratio of 7.7% is perfectly sufficient, but not now it ain't.
* H/t Cheekie Charlie at HousePrice Crash
Firstly because it's exactly what I recommended last week, and secondly it illustrates who's got whom over a barrel when domestic companies and assets are foreign-owned. If BAA were still owned by a UK-domiciled group, it would be able to exercise far more - in this case malign - influence over MPs to resist such a move.
Denis Cooper has done some more digging on Poland's attempts to retain at least a little of their national sovereignty, articles here, here, and here.
He sums them up thusly:
" ... the suggestion is not that the Treaty should be re-visited, but that the Bill to ratify it should have a preamble stating that 'Poland is a sovereign state and the country's constitution is its highest law'. A bit like Cash's New Clause 9, which was voted down by our patriotic MPs last week... this could all be very easily sorted out by Merkel issuing a few not-so-veiled threats about cutting funding to Poland, excluding Polish workers from Germany, and maybe mentioning that Poland had been put on the 'candidates for annexation' list along with Liechtenstein and the Sudetenland.
To remind you how it all ended up last time, let me repeat the famous words of one of Hitler's generals*, as they retreated into the Berlin Bunker in 1945 "Wenn das so weiter geht, dann können wir bald von der Westfront an die Ostfront mit der Straßenbahn fahren"**.
* I can't track down his name or precise rank.
** 'If things go on like this, we'll soon be able to take the tram from the Western Front to the Eastern Front'. Rather amazingly he was not taken out and shot for defeatism.
If you have to work out the total PAYE income tax and Employee's National Insurance deducted from your wages or salary, you can:
1. Waste about ten minutes with a set of tables, splitting your income into the different bands, calculating the tax due at 0%, 10%, 22% or 40% (from 5 April 2008, 0%, 20% and 40%) and the NI due at 0% and 11% and 1%, totting these all up, dividing by twelve or fifty-two as appropriate and knocking it off the figure you first thought of;
2. Use a handy online calculator, like this one; or
3. If you can't be bothered with method 1 and you aren't online, all you have to do* for a basic rate employee is knock off £5,444 and times the excess by 31%, or for a higher rate employee, knock off £14,562 and times by 41%. Then there's the stupid intermediate band between £40,040 and £41,435, where you have to add on £11,030 and times by 21%.
Which sort of begs the question, if you are on a low salary of £15,000, would you rather knock off £5,444 and pay 31% x £9,556 = £2,962, or knock off £14,562 and pay 41% on £438 = £180?
* Assuming a normal PAYE code of 544L for 2008-09
Friday, 14 March 2008
Call me old-fashioned, but I prefer this ....
Where there's life there's hope...*
* Illustrating that it is possible to be right for the wrong reasons - as it happens I am perfectly happy with the idea of gay marriages.
This idea is of course complete horseshit*, dreamed up by celebrity super-crook Lord Goldsmith.
As the nation's most senior and prominent public servant, perhaps Her Maj ought to be swearing an oath of allegiance to us?** She has kept her job for so long because She is very good at it, and She knows perfectly well what happens to unpopular monarchs (which is how She got the job in the first place!); which also explains why she is determined to hang on long enough to hand over the reigns/rein to Prince William, who at least understands the concept of 'keeping his mouth shut', the most important skill for a modern monarch.
* Hats off to Lynne Featherstone MP (Lib Dem, Hornsey and Wood Green) for dry wit - scroll down to the end of the link!
The authoritarians on Question Time were getting all hot and bothered about "faith schools flouting admission laws".
Am I the only one who thinks that this is actually A Very Good Thing?
1. It highlights the fact how rubbish most state schools are, and the fact that schools are vastly improved if there's a bit of good old-fashioned ethics and discipline (and I'm sure most atheists like me share these values!)
2. At present, house prices are much higher in the catchment areas of good state schools. When you buy a house there, you are paying a premium for the net present value of the 'free' education your kids will get. If schools start charging for that education directly, then the premium will be reduced, so instead of that extra money going to people who are selling a house in that area, it will go directly towards your kids' education.
3. It is a teeny-tiny step towards the idea of funding education via vouchers-plus-top-up-fees.
4. Libertarian philosophy says 'Leave people alone and see what they do'. The message is clear here - there is demand for good education and many parents are prepared to pay a bit extra for a better education for their kids, so rather than endless 'radical shake-ups', why not have a policy that 'goes with the grain'?
Thursday, 13 March 2008
Anybody who uses the word "should" when they mean "It would be nice if ..." or "I think that ..." is an authoritarian, judgmental twat and has lost the argument right there and then.
Compare and contrast...
"No child should live in poverty" can either mean "It would be nice if no child lived in poverty", and it's hard to disagree with that - it's a bit like saying "It would be nice if there were no such things as cancer; infant cot death or AIDS" - or it could be a foul excuse to make normal people feel guilty about the fact that they can survive under their own steam and make them pay ever more tax to entice young women without any career prospects to have kids, whether they can bring 'em up right or not.
"The poor should work rather than getting hand-outs" can either mean "It would be nice if we had full employment" which is widely accepted as being A Good Thing or it could mean "I begrudge paying tax to help people on no or low incomes", which from the mouth of anybody who benefitted from a free university education and a student grant all those years ago is rank hypocrisy.
When I use the word "should", I mean it in the narrower sense of "is likely to" (e.g. "cutting Employer's national insurance should increase employment levels"; or in the sense of "I would advise you to ..." (e.g. "you should always go to the loo before you leave a pub in the evening").
Nulab are so obsessed with the fact that better-off people's life expectancy is improving faster than that of people in 'deprived areas', that they forgot to give themselves a pat on the back for improving life expectancy by an average of 2 years over the last decade (at enormous cost to the taxpayer, of course).
Oh ... which is a piss-poor result really, seeing as life expectancy increased by an average of 2.7 years every decade over the course of the twentieth century.
The law is the law, and the police are supposed to enforce it.
While they're at it, they could stick six points on Adam Blake's licence for driving without due care and attention, as he was clearly paying far more attention to Jeremy Clarkson than to the road ahead.
I met this bloke who told me he'd worked out how to play 'Eruption'.
"Wow!" say I "Go on, play it!"
"Sure thing" he replied, and sat himself down behind his drum kit.
Great! Let's have some jealousy surcharges that will achieve absolutely nothing as follows:
1) If you already own a 'gas guzzler', and decide you don't want to pay the higher charge, you can always sell the car. But the second hand value will be depressed by the fact that the purchaser assumes the liability for the higher rates. So you have already lost your money, and you might as well stick with it.
2) Second hand values are now falling faster than normal because consumers are tightening their belts a bit, so no doubt the price of new cars will fall slightly as well to maintain the equilibrium. As to 'gas guzzlers', if the list price is £30,000 now, then once the new rates come in, the showroom will have to drop the price by about £770 to compensate the purchaser for the additional VED in the first five years or so.
Finally, once a car is on the road, the actual cost of petrol is only a fraction of the overall running costs, so having decided to stick with your old car (scenario 1) or bought a new car for slightly less (scenario 2) you might as well continue whizzing round in it.
Disclaimer - I do not own a car and don't believe in all this 'man-made-climate-change' nonsense, it's the middle of March and it's still bloody freezing!
Caveat - the fact that this tax will raise money without changing people's behaviour is, I suppose, A Good Thing (a bit like Land Value Tax), but they are still hypocrites of the highest ordure.
Wednesday, 12 March 2008
Tuesday, 11 March 2008
As is broadly agreed, even among its proponents, the EU is an empire, and as we well know from history, empires grow and grow until they seem all-powerful and then collapse* pretty quickly**. Something else that we learn from history is that things will not be 'different this time', nope, they will be the same. There are infinite strands to this, so it might be helpful to look at a number of areas in which the EU-project might start to become derailed, see posts (2) to (6) below. No doubt, when future historians write about the rise and fall of the EU, the reasons they give might be something else entirely - so if I've missed anything obvious, please leave a comment.
* If the converse were true, then all countries would have merged into empires, and all smaller empires would have merged into one large empire covering the whole world, which is clearly not the case.
** From Erich Honecker being chucked out to fall of Berlin Wall = one month; from fall of Berlin Wall to reunification of East and West Germany = eleven months; yada-yada; from German reunification to complete disintegration of Soviet Union = fourteen months. Notwithstanding that we have the Poles and Solidarity to thank for all this.
It might be the Euro-zone, rather than the EU that unravels first. Just over half of EU members are in the Euro-zone. The frictions between the Germanic hard-currency bloc and the Club Med countries are well documented, and tensions between the two are developing nicely.
But within Club Med, there is a sub-set of countries whose economies have relied unduly on a boom in construction stoked by EU-subsidies* and low Euro-interest rates**, namely Ireland and Spain. An article in The Telegraph*** gives us a few clues...
"We're in a classic post-bubble recession, yet we can't do anything that a country would normally do in this situation because we're inside the eurozone,"
The Nordic rescue [of the early 1990s] is seen as a model of how to tackle a banking crisis. However, Sweden succeeded only after it left the ERM's fixed exchange system and regained control of its monetary instruments.
However, [Ireland] is the most exposed in the EU to both the dollar and sterling blocs, leaving it more vulnerable to trade and investment effects of the soaring euro. Prof Kelly said Ireland had lost 20pc competitiveness against its trade partners since the launch of EMU.
*As at 2003, €392 per capita in Ireland, €214 per capita in Spain, with Portugal and Greece somewhere in between.
** When these countries joined the Euro-zone, real interest rates became negative. It is also interesting to note that despite the number of dwellings in Ireland increasing from 1.3 to 1.8 million since 1996, and despite half-a-million residential properties being built every year in Spain for nearly a decade (in a country with a population two-thirds of that of the UK), property price rises have been highest in these two countries.
*** Via Tim W and HousePrice Crash
The electorate appear to be a pretty gullible lot, but seeing as;
1. The EU and their acolytes have hitched themselves to the 'climate-change' bandwagon, which is rapidly being exposed as a Big Fat Lie*, and
2. The EU Parliament seriously want to engage in really unpopular bansturbation, such as banning patio heaters**, which might seem trivial, but in the popular imagination, what began as a protest against a tax on tea ended up with the American Declaration of Independence; who's to say the same might not happen again?
* In any event, are we supposed to believe that 'climate change', were it to exist, would affect Switzerland (being geograhically in the heart of Europe while remaining outside the EU) more than neighbouring countries? It's patent bollocks, surely?
** I could say the same for smoking in pubs, plastic bags or bottled water, but I'm not sure if this is NuLabour nonsense or EU nonsense, it's difficult to tell the difference any more.
Or it might be the good old instinct for (national) self-preservation that does for the EU.
It is all too easy to write this off as racism or xenophobia, which are officially Bad Things, and yes, a lot of racists and xenophobes are against the EU for no other reason, but there is, or will be, a backlash against Islamists in The Netherlands or in Scandinavian countries; against Romanian Gypsies in Italy; against 'scum' in France; against African refugees in Spain*, and, once the Irish economy has hit the skids, against immigrants to Ireland generally; who knows**? Not to mention the long-standing tradition they have in Germany and France of burning down homes for asylum seekers - attacks of such murderous viciousness that they really put the insult 'Little Englander' into perspective.
But you can't insult all the people all the time and get away with it. If they constantly deride Perfectly Ordinary People, who are suspicious about the EU, as 'racists' even though they're not, and to stifle all debate about the EU with cries of "Xenophobe!" then sooner or later that'll put up the hackles of Perfectly Ordinary People who will start to wonder what else the EU might have been lying about for all these years...
* Of course, not all of this is directly EU-driven, but it links in with the whole politically correct Geneva Convention-ECHR-human rights bullshit that the EU are trying to force upon us.
** I think that allowing Turkey in is yet another step too far - and as long as the French are against it, it's unlikely to happen - but part of me wishes they'd do it, just to speed up the inevitable demise thereafter.
The overall tenor of comments by the Lib Dem and Labour panellists on last week's Question Time was that 'MPs have to sign up to the Lisbon Treaty without a referendum because it's too complicated for the average voter to understand', while cheerfully admitting that they didn't understand it themselves*. Not that the Tories aren't total hypocrites in this regard, of course, with the notable exceptions of Bill Cash and John Redwood.
The original CON-stitution was rejected by the French lefties (for being too 'free market') and by the more free-market Dutch (presumably for being too Statist). Our next best hope is that the Irish, having rejected the Nice Treaty in 2002 and having filled their boots with EU subsidies over the past three decades**, now reject the Lisbon Treaty out of naked self-interest, despite the EU Parliament having decided to ignore the result anyway.
Don't forget that people don't like signing up to stuff that they don't understand, let alone allowing others to do it on their behalf. If you rent a house, or take on a new job, you don't know whether your new landlord or new employer will be a decent sort or a complete shit; similarly, a landlord or employer can't know whether a new tenant will pay the rent on time and leave the property in good condition, or whether a new employee will do what he's paid for or be a lazy scoundrel, but at least the battle-lines are clear. Who in their right mind would allow somebody else to sign you up for something far more fundamental than either? Where it's not clear what the point is or even where the battle-lines are?
* I in turn cheerfully admit that I am an average voter and I don't understand it either, and as I can't be bothered to spend months reading it and understanding the full enormity, I'd rather we didn't sign up, if that's all the same, thanks!
** €55 billion net subsidies since 1973 divided by population 4 million = €13,750 each, or over £10,000 each in old money.
... or finally, there's my old favourite Value Added Tax, the worst tax of all*.
Hopefully one day VAT-registered traders will wake up to the fact that this increases their marginal rate of corporation tax or income tax from 30% or 41% to something approaching 100% or more. I am finding it a hard struggle to explain to them that they do not just pay 17.5% on their gross mark-up, they pay 17.5% on their entire turnover (once you add net VAT liability and input VAT together) but hey ...
Even if VAT-registered traders fall for The Big Lie that 'VAT is borne by the customer', then hey, aren't we all consumers? Our tax burden is quite enough thank you, without fining us another 17.5% when we actually go out and spend what little we have left!
* With Employer's National Insurance running a close second.
Most proposed Citizen's Income schemes shy away from including Housing Benefit in the suggested flat-rate CBI, because while it would be perfectly affordable to extend the entitlement to low-rate benefits of £60 or so a week (such as Income Support, Jobseekers Allowance and Incapacity Benefit - currently claimed by around 5.3 million adults) to an additional two or three million adults on low- or no incomes, such as married mums and students, provided the worst excesses of the welfare system (e.g. Tax Credits) were scaled back or scrapped, increasing taxes to pay for an additional £82 per week for all households in Housing Benefit/Council Tax Benefit would be totally counter-productive (£68 plus £14, see previous link).
Opponents of Citizen's Basic Income-type schemes see this as an Achilles' Heel. Not so ...
As ever, it helps to look at the bigger picture: 82% of Housing Benefit claimants are in social housing (over 4 million households), so the amount paid out is a meaningless figure - this is merely different branches of government shuffling money round between themselves. We could achieve the same net transfer/subsidy without all the admin, fraud and hassle by simply reducing social rents*. There are only 750,000 households renting privately claiming Housing Benefit. As this is a subsidy to land ownership, it ought to be phased out anyway, or as a stop-gap, be replaced with 'Workfare' jobs paying a similar amount.
Looking at the even bigger picture, if we moved to proper Land Value Taxation, the LVT bill for households in smaller homes would drop anyway (compared to their current Council Tax/TV licence); LVT would be payable by the landlord/owner, not the occupier, so for tenants it would be absorbed into overall rent levels. As overall rent levels are set by market forces, these would by definition be 'affordable', so there would be no need for 'Land Value Tax-Benefit'. If you want to help the poor, it is always better to increase the tax-free personal allowance rather than to subsidise one particular item of expenditure (or taking the extreme view, to provide council housing at all).
Going further than that, I am in favour, as far as possible, of replacing taxation with user charges, preferably set locally so that everybody can decide whether they are getting value for money. And what are rents from social housing if not user charges? Further, don't forget that receipts from rents of social housing are currently earmarked and ring-fenced, so councils don't benefit if they manage to increase their rental income past a certain point! Surely, councils should be allowed to keep all the rents they collect, which will go in the same pot as locally collected Land Value Tax and other user charges?
And finally, Housing Associations are publicly funded, so they compete unfairly with private providers, and they are subject to fewer constraints than local councils. Their assets should be either sold off to private sector or brought back under local authority control.
* Or even better, setting rents in the social sector as a flat percentage of a household's income. Those with no income would pay the same as now, i.e. nothing; those on low incomes would have slightly lower net housing costs, but not face the ridiculous marginal withdrawal rate of 95.5% that results from means-testing of Housing/Council Tax Benefit; and those on high incomes (who shouldn't be in social housing anyway) will pay more so they are more likely to move into private renting or home-ownership. Trebles all round!
Obviously, the Tories made a big mistake when they sold off BAA as a job lot, any sensible government would break up this monopoly, which is of course inimical to free markets and competition, that's a no-brainer.
As to landing fees* generally, part of the MW manifesto is of course that the local councils should auction off landing/take-off slots and retain the proceeds themselves. As this is a user-charge rather than a tax, it would not impede workings of the free market unduly, while being a valuable source of revenue to balance out competing interests, in other words, the proceeds could be used to pay for extra sound insulation for local residents and for extra infrastructure like better transport links to and from airports. There is a natural upper limit to what councils can charge, of course, if they get too greedy, then 'planes will stop landing/taking off and receipts will fall.
A form of airborne Land Value Tax, if you will.
* It appears that landing fees are far too low anyway, as a 23.5% increase would only lead to a £2 increase in ticket prices. So we needn't worry about whether to charge VAT on fuel or international flights (a cornerstone of my tax policies is to scrap VAT); flat-rate landing/take-off fees would affect budget airlines (who cram their 'planes full - the Air Passenger Duty of average £15 per passenger would go of course) a lot less than more expensive airlines; flat-rate fees would make international flights cheaper relative to domestic flights, so people would be more likely to take the train for domestic but more wealthy international travellers would use the UK as a hub; the charge would be neutral between domestic and overseas airlines (who don't pay UK corporation tax); and so on and so forth.
Better transport links to/from an airport have a huge influence on whether people want to fly from/to that particular airport, and better local infrastructure makes it relatively more attractive to live near an airport, so it would be easier for the airport to find people willing to work there, so if the rates were set correctly, and the proceeds invested sensibly, such user-charges would lead to a virtuous circle.
** For another take on all this, see here.
*** I have done some rough workings as to potential total receipts, based on grey market price of slots here.
This idea is not new, and it might not 'work', but surely it's worth a try, just for one season or so?
As a free-market-liberal-climate-change-sceptic, I have to say I agree with the Scottish Green Party on this one.
Monday, 10 March 2008
Tee hee. This article explains in nice simple terms how and why the Euro will go *pop*.
As I always say, if currency unions were such a good idea, surely we'd be down to just a few currencies by now, a bit like the way minor languages are dying out while the use of English, Spanish, Arabic etc is constantly increasing, but we aren't. So there must be something inherently unstable about currency unions. Should be fun!
Update - apparently the Irish are none too happy about the Euro either, now that their construction bubble has imploded. However, I'm not sure whether the Irish would be able to go without the €396 each that the EU is bunging them - especially in a down-turn, assuming the EU had the nerve to threaten to cut off their funding as punishment for leaving the Euro, hey, the EU could even ask them to start paying something back!?
Sunday, 9 March 2008
On Andrew Marr's show on the BBC he came out with this:
"Well*, first of all the corporation tax rate, that's the tax rate that businesses pay, is one of the most uncompetitive in the world, at 28p. And we live in a globalised economy where these businesses can either invest in Britain or they can go to China, or they can go to Ireland, just across the Irish Sea, where there is a 12½% rate. So having a low corporation tax rate is extremely important in the modern economy if we're going to attract jobs to this country."
Wrong, on so many levels...
1. The three main taxes on business/productive activity in the UK are VAT (£77.4 bn), corporation tax (£44.5 bn) and Employer's National Insurance (about £34 bn).
2. The UK's headline corporation tax rate is pretty "competitive", when compared to G8 countries, India, China, Australia and Switerland. Figures taken from KPMG’s Corporate and Indirect Tax Rate Survey 2007 and rounded to nearest per cent:
But, as I have explained before, corporation tax is not so important - it slows down the rate at which a business can grow, but doesn't impact on the economy as much (a good pre-tax decision is usually a good post-tax decision) or put people out of business (if your profits are low, you don't have to pay very much). Sure, it would be nice if the UK were 'internationally competitive', but let's get our own house in order first, remembering that 80% of our economy is purely domestic, only about 10% is imports and 10% exports.
3. VAT is the biggest/worst tax on productive activity - whether it is borne by producer or consumer is a pointless debate, seeing as most of us are both producers and consumers - it puts up prices to consumers, it reduces the gross income of producers and it makes low-margin businesses unviable. Further, corporation tax is only charged on a small slice of a business' turnover - the net profit, as against VAT (or 'General Sales Tax') which is levied on the entire turnover. So it is far more important to look at VAT/GST rates. Here, the UK is pretty "uncompetitive" compared to the same sample of countries:
So can't we look to reduce VAT first, once we've left the EU**, please George, and stop yapping on about corporation tax?
4. As to Employer's National Insurance, this is bollocks entirely of our own making of course - the post-war Labour Government thought is was a fine scam to sell a new tax as insurance. If you want full employment, wouldn't it be a good idea to get rid of a tax that makes wages more expensive, and hence reduces equilibrium employment levels?
5. As to the Laffer Curve, if you scrapped VAT and Employer's National Insurance, the 'cost' would be nowhere near £111 bn - initially, if prices and wages remain constant, profits would soar by £111 bn and so corporation tax receipts would increase by £33 bn. And of course businesses would expand to fill the new opportunities that are now profitable that were unprofitable before, employment would increase, welfare costs would fall, goods in the shops would be cheaper. I would be surprised if the long run 'cost' of scrapping these two taxes would be more than half current receipts, say £55 bn. And if you can't find £55 bn of waste in the public sector (i.e. one or two million totally superfluous jobs), you are probably the sort of person who would struggle to find a bass drum in a telephone booth.
* I hate it when politicians start a reply with "Well..." it is so irritating, they all do it. All the time.
** Can you spot the logical error in that exhortation?
The advert in my local 'PropertyMart' for Redrow's 'Re:assure House Price Promise' contains these gems:
1. "If a customer comes to sell their Redrow Property [within three years] and gets less than they paid, we will refund the difference up to 10% of the purchase price paid..."
2. "... our re:assure package includes measures to help people sell their current property at the best possible price; we may also take the property in part exchange, enabling them to make a quick and easy move with no fear of the chain collapsing."
3. "For those worrying about finding the money to pay the mortgage every month we may be able to provide a substantial subsidy for the first year or two; while those struggling to raise a 5% deposit, stamp duty or legal fees up-front, may prefer us to pay one or more of these instead".
In entirely unrelated news, new build flats in Manchester are selling for barely half their original price; the number of first-time buyers hits a 27-year low and major UK banks announce that they will increase mortgage rates by 0.3% on the same day that the bank of England leaves its base rate unchanged.
Saturday, 8 March 2008
If you are trawling the Interweb, trying to find out how much is paid out in Tax Credits, Child Benefit and Child Trust Fund in the UK, you'll no longer find it with most other welfare payment in the DWP's good old Table 3. That's because they are now administered by HM Revenue & Customs. And can you find the statistics on their website? Nope, the stuff available here is just drivel about 'meeting performance targets'.
I happened to remember that the last time I found these statistics, they were buried away in HMRC's Annual Report at the back in the 'Trust Statement'. If you google that phrase, you discover, rather unsurprisingly, that the National Audit Office has expressed reservations about the accounting for Tax Credits for the fourth .. no ... fifth consecutive year.
Then you finally track down HMRC's 2006-07 Annual Report & Trust Statement, not, as you might expect on the normal HMRC website, not even on a 'gov.uk' website, but in the 'eu' domain, and to throw people off the scent even further, they transposed the URL from 'hmrc' to 'hmcr', so it ends up as "www.hmcr.eu/about/hmrc-06-07-acc.pdf".
And they've shifted Child Benefit payments into the 'Operating Cost Statement', heck knows why...
I drifted off the topic a bit in my earlier post, so here's a summary:
There are other identifiable categories, firefighters, probation officers, foreign office, coastguard, air traffic controllers etc (some useful, some not), but the numbers are relatively small so are ignored here. And sure, schools, hospitals and police stations need receptionists, cleaners and so on, but surely we can manage with three million on the public payroll (notwithstanding that health and education should be privately provided, even if taxpayer funded via vouchers)?
My (rhetorical) question is; why are there over five million people paid by the taxpayer (that's one-in-six of all employees) of no apparent benefit to society at large? Why? How have we let this happen? Nearly one percent of all workers are involved in collecting tax and dishing out benefits, how many more are there in the private sector filling in the forms in the first place? Is this all really necessary? And don't forget that the true cost of a civil servant's pension is another one-third of his or her current salary, so that's the equivalent of over seven million superfluous jobs in total!
Teachers & teaching assistants
Nurses & doctors (1997, 2007)
HM Revenue & Customs
Dept. for Work & Pensions
Public sector (Column D)
Public admin, education and health (Column M)
NB, the figures are not entirely consistent, some are for UK, some for England & Wales only. Some are from a year earlier or later. This does not detract from the overall picture.
The Adam Smith Institute have come out in favour of 'Pay-as-you-throw'.
"the report stresses that PAYT must not be used as a 'bin tax' and that its introduction must be accompanied by a corresponding fall in council tax ... The report also calls for the full liberalization of the refuse collection sector, so that private companies would have to compete for customers"
Woah! Slightly wrong on all counts!
The whole topic of refuse collection is a lot of sub-issues, you have to deal with these on a 'divide-and-conquer' basis.
1. Some things are worth recycling, there is a market for waste paper, used aluminium and steel cans and so on. Councils have to rely on the good conscience of their residents to put these into separate bags or boxes, and councils can sell these to private companies for market value, the proceeds should come off the costs of waste collection. Those people who are too lazy or inconsiderate to do this are hardly going to change their behaviour as a result of tweaks to the tax system.
2. Some stuff burns, like plastic, cardboard, polystyrene. This should be taken to incinerators as cheap raw material for electricity generation. Again, this must have some market value to the company that runs the incinerator, so it reduces the cost to the council and hence to households of refuse collection*.
3. Some stuff rots, which the council can use to make into compost for free use at its allotments (like in Waltham Forest) or, remembering that methane is a far more powerful greenhouse gas than CO2** for methane generation, which in turn can be used to generate electricity or even as an alternative to petrol in cars***.
4. There's glass. Hmm. Seeing as most of our bottles and jars came from abroad, there is more than enough waste glass to provide domestic producers, and it seems a bit mad to sail crushed wine bottles back to South America or Australasia. I suggest we chuck the excess into the ocean where it can turn back into nice shiny sand.
5. There's poisonous stuff, like batteries, oil, paint and the like, this has to be dealt with separately.
6. There's bulky stuff, mattresses, fridges and so on.
7. As to the Adam Smith Institute's final point, privatising refuse collection and allowing companies to compete for customers, they tried that in New York and it got taken over by organised crime who just dump everything in the river. And what do I do if my neighbours 'opt out' of waste collection and just let it pile up in the street? Refuse collection is not just for the benefit of an individual household, it is for the benefit of your neighbours as well, the local council does have a rôle to play here as final arbiter, even if the council itself sub-contracts to private bidders (as most of them do).
Right. Now we can look at taxation.
A cornerstone of my tax policies is to get rid of VAT, which'll be the first thing on the agenda once we've left the EU, just to set the scene ...
Let's start with bulky stuff, that's easiest. It is pointless trying to make people pay for the council to remove bulky stuff, you just end up with fly-tipping - but for every fridge that is chucked out, a new one is bought. So why not levy the tax on the purchase of new mattresses or fridges instead? If it costs the council £20 to dispose of a fridge, then there should be a £20 tax on new fridges. And it will make second-hand fridges cheaper relative to new ones, so there's your recycling/re-use thrown in!
If the value of recyclable waste (aluminium, paper) exceeds the cost of collection, the council is breaking even. There is no need for any further tax.
It costs about £100 to incinerate a ton of rubbish, so there should be a £100/ton tax on plastic, cardboard and polystyrene at the point of production or import. A plastic bag weighs one-third of an ounce, so that's a tax of one-tenth of a penny per plastic bag, and so on.
The same principles apply to every other category. Assuming that domestically produced waste glass can be sold back to domestic producers, that is cost/raw material neutral. If it costs £10 to transport a ton of excess imported glass to the middle of the ocean and dump it, then you'd have a tax of £10/ton on the imported glass bottles or jars. An empty wine bottle weighs about 1lb, so the tax on that would be half-a-penny. The nasty stuff, like batteries, engine oil, electronic stuff costs £400 a ton to 'process'. An AA-battery weighs half-an-ounce, so there'd be a tax of half-a-penny on an AA-battery, 50p on a Mac Mini, about £5 on a PC, and so on.
Finally, there'll always be residual stuff that goes to landfill. Landfill Tax is one of the most insane taxes we have. £32 a tonne! What are the real costs of landfill? Well, one acre of agricultural land sells for anything up to £5,000. That's £1 a square yard! If you pile waste ten yards deep, you can easily squeeze ten tons of waste on every square yard. So to protect something worth £1, the government wants us to pay £380? Are they completely mad?
I accept that there is some hysteria about the whole country ending up as a giant landfill site, but fear not, fellow citizens! Total waste per household is about 1.3 tons, surely half or three-quarters**** of this can be dealt with as above? That leaves 0.3 tons x 25 million households = 8 million tons per annum, which, piled ten yards deep would cover about a quarter of a square mile. Provided you dig the holes deep enough, you can cover 'em up again afterwards, job done. Even if we didn't cover them up, it would take four millennia before even one percent of the UK were covered with residual household waste.
* As I posted on Blog Action Day "... the proposed waste incinerator at Belvedere, East London, will be able to burn over 500,000 tons of waste a year (the waste generated by about 400,000 households in a year) and generate 66 megawatts of electricity, or enough for 66,000 homes." And all these greenies can shut up - of course, part of the planning permission has to be that they separate out the really poisonous stuff and have proper filters and so on. There has been a massive waste incinerator in the middle of Munich for decades and you can't smell a thing. Fact. And if people don't want to live near them, then build them in the middle of the countryside or something.
** To the extent that you believe in this man-made-climate-change stuff at all, of course. Many don't.
*** The funny thing is that Waltham Forest gives you a separate brown wheelie bin into which you put all your organic kitchen and garden waste, whereas the council where we now live asks you to put kitchen waste into the normal wheelie bin, and asks you to put out garden waste separately. I think that Waltham Forest is correct on this one, but hey...
**** Ten years ago, we used to fill up our wheelie bin every week. Now that we separate out glass, plastic, cans and paper, it takes us one month to fill it with whatever's left (they do alternate fortnightly collections where we live now, but they missed us out two weeks ago and it was just about full). So if they asked us to put organic kitchen waste separately, we'd be down to about one-fifth of the volume of ten years ago.